One CPA's thoughts on critical issues and opportunities facing the profession.

The FASB has been busy

While you have been wrapped up in year-end close and audit work, the FASB has been busy issuing new and proposed standards in 2017. The FASB has issued six – yes, six – new standards in 2017 as well as two proposals. To help you catch up, this blog will cover the most significant new standards as well as the two proposals.

Significant new standards:

Goodwill Impairment

Effective in 2020, early adoption permitted.

The standard eliminates the old two-step approach to determining impairment.

Instead, the loss is the difference between fair value and carrying value calculated in step one.

This simplification will likely be a target of early adoption by many companies because it greatly simplifies the testing process.

Definition of a Business

Effective in 2018, early adoption permitted.

In determining if a purchase/sale is a business there is now an initial screen – if substantially all of the fair value is in a single asset or a group of similar assets, then it is the purchase/sale of an asset.

A business must include an input and a substantive process which provide ability to create outputs (output is consistent with ASC 606); otherwise it is an asset.